Orchard Raises $30 Million In An 'Insane' Round Of Financing

Last week, I reported how Orchard Platform, intermediary to the intermediaries of marketplace lending, had approached investors for an equity injection. The company, which helps fixed-income investors buy and track a fast-growing volume of consumer loans, sought as much as $30 million, less than a year after it had raised $12 million. That earlier financing set Orchard's value at $50 million.

On Thursday, Orchard announced that it had indeed secured $30 million in a second round of financing. Venture wunderkind Josh Kushner and his Thrive Capital led an A-list of investors, including former Goldman Sachs president Jon Winkelried, Victory Park Capital, and Thomvest Ventures.

Joshua Kushner (Credit: Thrive Capital)

Orchard declined to disclose its terms for the new financing, but one prospective fund manager who passed on the transaction said it likely put the company's value "north of $200 million" — a figure this investor called "insane." The buyers "are taking a venture-style risk." Some of the largest originators are actively hostile toward Orchard, given its potential for leveling the lending playing field for loan buyers, this source continued. "There's a lot of uncertainty about the business model and the team."

But Caanan Partners' Dan Ciporin, an early Orchard champion, dismissed such concerns. "We're certainly happy with the valuation," said Ciporin, who orchestrated both last year's financing and an earlier seed round and participated in this round as well. "We had lots of demand, we had to turn away lots of folks."

Orchard's coup came as two other industry newcomers, both loan-makers, announced that they had separately raised $85 million. Just as some investors can't get enough of marketplace lending, others, it seems, can't get enough of marketplace lenders — or their ancillaries.

I have reported on entrepreneurs, and the politics and policies that affect them, for The New York Times and Inc. magazine, among others, for more than a decade. I've also written about technology and public policy – particularly about renewable energy – for Discover and IE...